The Ambassador Hotel (left) pictured on Tuesday at 1111 Grand Blvd. in downtown Kansas City, is asking to create a Community Improvement District to help finance expansion of the hotel atop its adjacent parking lot. ALLISON LONGalong@kcstar.com

The Ambassador Hotel (left) pictured on Tuesday at 1111 Grand Blvd. in downtown Kansas City, is asking to create a Community Improvement District to help finance expansion of the hotel atop its adjacent parking lot. ALLISON LONGalong@kcstar.com

Boutique hotel in downtown Kansas City is ready to expand

The Ambassador, a 43-room boutique hotel in downtown Kansas City, is observing its fifth anniversary with an intent to grow.

The upscale hotel at 1111 Grand Blvd., which rescued a collapsing 1906-era bank building from demolition, wants to add 70 rooms in new construction.

Expansion plans came to light in a petition filing to create a Community Improvement District that would help fund improvement costs through a 1-cent sales tax. The tax would be assessed solely within the hotel’s existing and expanded property lines.

The CID financing mechanism would follow a recent pattern set by The Intercontinental to help defray its renovation costs across the street from the Country Club Plaza. The still-in-the-planing-stages downtown convention hotel also will use a CID sales tax as a revenue source for the development.

Coury said The Ambassador’s occupancy rates have risen along with the downtown resurgence, especially since the hotel in 2014 became part of the Marriott Autograph Collection and achieved Four-Diamond AAA ratings.

“The demand for full-service properties with restaurants tends to be at the higher end of the food chain,” Coury said. “We don’t really cater to the conventions. We pick up the more discerning business traveler and the weekend social traveler. But at just 43 rooms, you really can’t make money even if you’re running full.

“We’re going to add 70 rooms to make this into a more profitable venture by getting over the 100-room level. That’s sort of the magic break point in the industry.”

Coury said the development team, which includes Jason Swords with Sunflower Development, is working with the Economic Development Corp. of Kansas City to explore other possible sources of public financing, possibly including property tax abatement.

Attorney John McGurk, representing the development team, said a rezoning also is likely to be required.

The hotel now operates in a Planned Industrial Expansion Area. That declaration, coupled with a blight designation for the initial redevelopment, paved the way for the hotel to open in 2012.

The redevelopers acquired the property for about $1.5 million in 2010 and spent about $8 million to create the hotel and its ground-floor restaurant, The Reserve.

Swords said the hotel expansion would be an important part of redevelopment plans on the 1100 block of Grand. Sunflower also is working on a major renovation of the Traders Tower at the corner of 12th and Grand.

“With the hotel addition and the tower, we’re topping out nearly $75 million in new development on the block” Swords said. “From the Sunflower standpoint, we’re very pleased.”

The CID sales tax, which would be good for 20 years if authorized, is estimated to generate about $71,300 in its first year and about $1.7 million over its 20-year life, as proposed.

Coury Hospitality, based in Tulsa, has specialized in restoring historic buildings. It has boutique hotels under the Colcord or Ambassador flags in Wichita, Oklahoma City and Tulsa, where it took on its first boutique hotel project.

Coury said the development team would like to start construction in October, provided it gets the plan approval and financing that it needs from Kansas City’s governing bodies.